Polkadot 2.0 is a catch-all term for a new vision for the future of the Polkadot network.
Polkadot founder Gavin Wood hopes that Polkadot 2.0 will become a “universal, flexible computing resource” once it is deployed.
What is Polkadot 2.0?
While it may sound like a technical upgrade, Polkadot 2.0 is not a specific event. Instead, it is a set of changes that will radically change the capabilities of the blockchain.
At a general level, Wood used the metaphor of a pancake business to explain the transition to Polkadot 2.0. Imagine a company that only sells pancakes; it produces its own sugar, water, milk, and eggs, but only sells pancakes. These pancakes are the “parachains,” and the pancake company is Polkadot 1.0.
Polkadot projects are all built on separate blockchains, called parachains.
Unlike blockchains like Ethereum, where developers can build on a central chain, these parallel blockchains can scale and operate together efficiently and securely, relying on the security, isolation, and communication capabilities of the Polkadot network.
In Polkadot 2.0, the company decided to start selling pancake mixes, even sugar, water, and eggs. These separate ingredients are what are called “coretime,” units of computing resources that users can rent in fractions.
Customers can use these ingredients to make other products, not just pancakes, but also bread or cakes.
On Polkadot 2.0, developers will not need to go through a time-consuming bidding process to get parachains.
The current auction process requires potential developers to make a significant investment before their project can be launched. They need to have people trust them to stake their crypto to support their project, in order to win one of the limited number of parachains, which means shifting focus and resources to non-technical areas such as marketing and branding.
Gavin Wood believes that providing an alternative to the auction approach will make the ecosystem “more flexible” and lower the barrier to entry for new projects.
In a fully fledged Polkadot 2.0, anyone will be able to easily interact with Polkadot, accessing the power of the global supercomputer without having to invest too much. Polkadot 2.0 overall represents a shift from a chain-centric approach to an application-centric one.
What role does JAM play in this process?
The JAM upgrade is scheduled for April 2024. When completed, it will deliver on many of the promises of Polkadot 2.0. It will be the biggest update in Polkadot’s history since the blockchain was fully launched in 2021. JAM will replace the Relay Chain, the foundation on which the entire Polkadot ecosystem relies.
Unlike Polkadot 2.0, JAM is not a shared vision but a specific technical update. JAM and Polkadot 2.0 are closely related but distinctly different.
A core part of JAM is the introduction of something called Agile Coretime. This will replace the current auction system with a more economically flexible model that allows Polkadot users to purchase Coretime, the computational resources provided by JAM, on a monthly basis.
Coretime, once purchased, can be split and resold on the secondary market, improving the efficiency of the computing resource market. All these Coretime transactions will use DOT, the native token of the Polkadot ecosystem.
What will Polkadot 2.0 bring?
The increased scalability brought by the flexibility that Coretime brings can be applied in many different industries, as projects can purchase processing power in small increments.
For example, a Polkadot-based Web3 game could use Coretime to buy more processing power when demand is high, such as during the Christmas-New Year period, but avoid overspending during the low-demand weeks. Or an NFT project could increase its computing power immediately after a busy launch day.
Additionally, a healthcare provider could control costs by quickly purchasing additional processing power in the event of a large-scale medical emergency, while keeping operating costs low during periods of normal demand.
With the auction system gradually replaced by Coretime, businesses will be able to build on Polkadot without having to deal with tokens. This could help Web2 companies, less experienced in the Web3 space, avoid many of the legal complexities associated with cryptocurrencies or securities issuances, which exist in many jurisdictions.
How Does Polkadot 2.0 Affect Parachains?
The introduction of Polkadot 2.0 won’t eliminate Polkadot’s signature parachain network — but developers will have a viable and accessible alternative to build on Polkadot.
In a way, Polkadot 2.0 combines the parachain-focused functionality of the original Polkadot and the smart contract-focused approach of Ethereum’s current version.
Gavin Wood has described JAM as a “less oriented” version of Polkadot, as it doesn’t try to steer users toward any particular approach — and you can apply this to Polkadot 2.0.
What other technical updates will come with Polkadot 2.0?
Polkadot 2.0 will also introduce a feature called “accords,” which are designed to improve interoperability and message exchange between parachains.
Accords are agreements that different protocols can voluntarily enter into. The purpose is to ensure that the rules regarding interoperability are maintained consistently and cannot be tampered with by any protocol once they have entered into them.
Parachains that have signed an accord can trust that the Cross-Consensus Messaging (XCM) messages used to communicate between parachains will be properly interpreted and executed in a “trustless” environment.
When will Polkadot 2.0 launch?
Since Polkadot 2.0 is not a specific update but rather a broader vision for blockchain, there is no specific date for Polkadot 2.0 to go live.
However, JAM, which is the technical foundation for realizing the promises of Polkadot 2.0, is expected to launch between 18 and 58 months from now. But since JAM is not an iterative update, it will be completed all at once.
That said, it will likely take time for the community to build products and services that can take advantage of the capabilities of the JAM upgrade, making the Polkadot 2.0 vision a reality.
The Web3 Foundation is currently offering a series of generous rewards to incentivize developers to work on implementing the JAM protocol.
The JAM Implementer Reward is offering up to 10 million DOTs — about $60 million at current prices — to developers who can meet specific performance testing criteria.
